Archive - April 2014

1
Be Careful When Converting
2
What Happened to the Gold Standard?
3
Are Treasury Rates Too High?
4
New Year- New Decisions to Make
5
Realize Some Capital Gains Each Year To Keep Taxes Low

Be Careful When Converting

When converting from a 401(k), traditional IRA, 403(b), SIMPLE IRA, SEP or 457(b) to a Roth IRA there are some important tax considerations to keep in mind.

First, converting from a tax deferred plan to a tax free plan it’s not always the best idea. Generally, it’s going to make sense to convert if the tax payer believes that he or she will be in a higher income tax bracket in retirement. For example, John, age 28 has a 401(k) and recently left his employer. He’s currently in the 15% bracket but expects to be in the 28% bracket or …

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What Happened to the Gold Standard?

The U.S. dollar was first regulated by the Coinage Act of 1792 and prescribed as 371.25 grains of pure silver. The eagle, worth $10, was 247.5 grains of gold. One cent, worth a hundredth of a dollar, was 24 grains of copper.

The value of the metal contained in the currency kept prices relatively constant before the founding of the Federal Reserve. During those 120 years, prices rose only 3%. In contrast, during the 100 years since the Federal Reserve, prices have risen 2,280%.

The Constitution gives Congress the power to “to coin money” and “regulate the …

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Are Treasury Rates Too High?

Rob Arnott was quoted in on April 19 issue of Barron’s where said that the growth rates of 3% in 1945-1970 were a historical oddity due to demographics of rising population, etc.  He said real GDP is now 2% and will go to 1%. The implication is that, assuming inflation remains low, the current pricing for the 10 year Treasury with a yield of 2.7% is fair. Historically the 10 year Treasury yields the nominal GDP, so if real GDP is 1% and in the future inflation is 1.5% then the current yield is legitimate. Van Hoisington said last week …

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New Year- New Decisions to Make

“I don’t really need wealth management services.”

We find that some people are uncertain what wealth management services actually encompass.  Some think of advisors as purely investment focused.  Others think advisors simply throw clients into cookie cutter asset allocations.  We focus on educating our clients and prospective clients on the benefits of integrating comprehensive financial planning with customized portfolio management in an all-encompassing service to seek to accomplish the long-term financial goals of high net worth individuals and their families, charitable foundations, and trusts.  We find the following questions help provide a better picture of what comprehensive financial planning encompasses.…

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Realize Some Capital Gains Each Year To Keep Taxes Low

Capital gains taxes became very confusing last year. There are at least four different rates which you might pay depending on how much income and how much gain you have in any particular year.

0% Capital Gains Tax Rate

This capital gains rate is available for those in the 10% or 15% federal tax brackets (2014 under $73,800 married filing jointly or $36,900 filing single).

If you are in these tax brackets, you should be realizing capital gains between your current AGI and the top of the 15% tax bracket each year. Whatever gain fits under the top of the …

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